HomeMy WebLinkAbout17-513 PendrakSTATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 1 71 08 -1 470
(717) 783 -1610
1- 800 -932 -0936
ADVICE OF COUNSEL
March 20, 2017
To the Requester:
Mr. Matthew D. Pendrak
Dear Mr. Pendrak:
17 -513
This responds to your letter dated January 11, 2017, by which you requested an
advisory from the Pennsylvania State Ethics Commission ( "Commission ").
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
P-a-T-S. § 1101 et seg., would impose prohibitions or restrictions upon an individual
serving as a township supervisor, who is also a township employee, with regard to
performing electrical work for the township either as a township employee or in his
private capacity as a licensed master electrical contractor /owner of an electrical
services business.
Facts: You request an advisory from the Commission based upon submitted
acs hat may be fairly summarized as follows.
You are a Supervisor for Jefferson Township ( "Township "), located in
Lackawanna County, Pennsylvania. You are also a Township employee.
In a private capacity, you are a licensed master electrical contractor and the
owner of an electrical services business ( "the Electrical Services Business ").
Based upon the above submitted facts, the question that is presented is whether
the Ethics Act would impose prohibitions or restrictions upon you with regard to
performing routine electrical maintenance upgrades, electrical repairs, or emergency
electrical work for the Township. As it is unclear from your request letter whether you
would do such work as a Township employee or in your private capacity as a licensed
master electrical contractor /owner of the Electrical Services Business, this Advice shall
address both possibilities.
Discussion: It is initial) noted that pursuant to Sections 1107(10) and 1107(11) of
the Ethics Act, 65 Pa.C.S. y§§ 1107(10), (11), advisories are issued to the requester
based upon the facts that the requester has submitted. In issuing the advisory based
upon the facts that the requester has submitted, the Commission does not engage m an
independent investigation of the facts, nor does it speculate as to facts that have not
been submitted. It is the burden of the requester to truthfully disclose all of the material
FAX: (717) 787 -0806 0 Web Site: www.ethics.state.pa.us 0 e -mail: ethics @state.pa.us
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facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords
defense to the extent the requester has truthfully disclosed all of the material facts.
As a Township Supervisor, you are a public official subject to the provisions of
the Ethics Act.
Sections 1103(a) and 11030) of the Ethics Act provide:
§'1103. Restricted activities
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
0) Voting conflict.- -Where voting conflicts are not
otherwise addressed by the Constitution of Pennsylvania or
by any law, rule, regulation, order or ordinance, the following
procedure shall be employed. Any public official or public
employee who in the discharge of his official duties would be
required to vote on a matter that would result in a conflict of
interest shall abstain from voting and, prior to the vote being
taken, publicly announce and disclose the nature of his
interest as a public record in a written memorandum filed
with the person responsible for recording the minutes of the
meeting at which the vote is taken, provided that whenever a
governing body would be unable to take any action on a
matter before it because the number of members of the body
required to abstain from voting under the provisions of this
section makes the majority or other legaily required vote of
approval unattainable, then such members shall be
permitted to vote if disclosures are made as otherwise
pprovided herein. In the case of a three - member governing
body of a political subdivision, where one member has
abstained from voting as a result of a conflict of interest and
the remaining two members of the governing body have cast
opposing votes, the member who has abstained shall be
permitted to vote to break the tie vote if disclosure is made
as otherwise provided herein.
65 Pa.C.S. §§ 1103(a), (j).
The following terms related to Section 1103(a) are defined in the Ethics Act as
follows:
§ 1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate
family or a business with which he or a member of his
immediate family is associated. The term does not include
an action having a de minimis economic impact or which
affects to the same degree a class consisting of the general
public or a subclass consisting of an industry, occupation or
other group which includes the public official or public
employee, a member of his immediate family or a business
Pendrak, 17 -513
March 2 , 2017
Page 3
with which he or a member of his immediate family is
associated.
"Authority of office or employment." The actual
power provided by law, the exercise of which is necessary to
he performance of duties and responsibilities unique to a
particular public office or position of public employment.
"Business." An corporation, partnership, sole
proprietorship, firm, enterprise, franchise, association,
organization, self - employed individual, holding company,
joint stock company, receivership, trust or any legal entity
organized for profit.
"Business with which he is associated." Any
business in which the person or a member of the person's
immediate family is a director, officer, owner, employee or
has a financial interest.
"De minimis economic impact." An economic
consequence which has an insignificant effect.
65 Pa.C.S. § 1102
Subject to the statutory exclusions to the Ethics Act's definition of the term
"conflict" or "conflict of interest," 65 Pa.C.S. § 1102, a public official /public employee is
prohibited from using the authority of public office /employment or confidential
information received by holding such a public position for the private pecuniary benefit
of the public official/public employee himself, any member of his immediate family, or a
business with which he or a member of his immediate family is associated.
In each instance of a conflict of interest, the public official/public employee would
be required to abstain from participation. The abstention requirement would not be
limited merely to voting, but would extend to any use of authority of office including, but
not limited to, discussing, conferring with others, and lobbying for a particular result.
Juliante, Order 809. Subject to certain statutory exceptions, in each instance of a voting
conflict, Section 11030) of the Ethics Act would require the public official/public
employee to abstain and to publicly disclose the abstention and reasons for same, both
orally and by filing a written memorandum to that effect with the person recording the
minutes.
One of the exclusions to the statutory definition of "conflict" or "conflict of
interest," referred to herein as the "de minimis exclusion," precludes a finding of conflict
of interest as to an action having a de minimis (insignificant) economic impact. Thus,
when a matter that would otherwise constitute a conflict of interest under the Ethics Act
would have an insignificant economic impact, a conflict would not exist and Section
1103(x) of the Ethics Act would not be implicated. See, Kolb, Order 1322;
Schweinsbur , Order 900. The Commission has determined tie applicability of the de
mmimis exc usion on a case -by -case basis, considering all relevant circumstances. In
the past, the Commission has found amounts up to a proximately $1,200 to be de
minimis. See, Fidler, Order 1637. You are cautioned that the economic impact of an
individual's conU—uct may aggregate over time, rather than be limited to a particular
increment of time such as a month or year. Confidential Opinion, 05 -001; Corey,
Opinion 13 -006; Mann, Opinion 14 -003.
Section 1103(f) of the Ethics Act, pertaining to contracting, provides as follows:
§ 1103. Restricted activities
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(f) Contract. - -No public official or public employee or
his spouse or child or any business in which the person or
his spouse or child is associated shall enter into any contract
valued at $500 or more with the governmental body with
which the public official or public employee is associated or
any subcontract valued at $500 or more with any person
who has been awarded a contract with the governmental
body with which the public official or public employee is
associated, unless the contract has been awarded through
an open and public process, including prior public notice and
subsequent public disclosure of all proposals considered and
contracts awarded. In such a case, the public official or
public employee shall not have any supervisory or overall
responsibility for the implementation or administration of the
contract. Any contract or subcontract made in violation of
this subsection shall be voidable by a court of competent
jurisdiction if the suit is commenced within 90 days of the
making of the contract or subcontract.
65 Pa.C.S. § 1103(f).
The term "contract" is defined in the Ethics Act as follows:
§ 1102. Definitions
"Contract. " An agreement or arrangement for the
acquisition, use or disposal by the Commonwealth or a
political subdivision of consulting or other services or of
supplies, materials, equipment, land or other personal or real
property. The term shall not mean an agreement or
arrangement between the State or political subdivision as
one party and a public official or public employee as the
other party, concerning his expense, reimbursement, salary,
wage, retirement or other benefit, tenure or other matters in
consideration of his current public employment with the
Commonwealth or a political subdivision.
65 Pa.C.S. § 1102.
Section 1103(f) does not operate to make contracting with the governmental
body permissible where it is otherwise prohibited. Rather, where a public official /public
employee, his spouse or child, or a business with which he, his spouse or child is
associated, is otherwise appropriately contracting with the governmental body, or
subcontracting with any person who has been awarded a contract with the
governmental body, in an amount of $500.00 or more, Section 1103(f) requires that an
open and ublic process" be observed as to the contract with the governmental body.
Section 1103(f) of the Ethics Act also provides that the public official /public employee
may not have any supervisory or overall responsibility as to the implementation or
administration of the contract with the governmental body.
In ap lying the above provisions of the Ethics Act to the instant matter, you are
advised as follows.
The Electrical Services Business is a business with which you are associated in
your capacity as the owner.
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Subject to the statutory exclusions to the definition of "conflict or "conflict of
interest" as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102, pursuant to
Section 1103(x) of the Ethics Act, you would have a conflict of interest as a Township
Supervisor in matters that would financially impact you or the Electrical Services
Business.
If electrical work would be performed for the Township as a Townshi p employee:
Section 1103(a) of the Ethics Act would not prohibit you from performing
electrical work for the Township as a Township employee. However, if you would
receive compensation beyond your regular Township employee compensation as a
result of performing electrical work, such as overtime pay, Section 1103(a) of the Ethics
Act would prohibit you from using the authority of yyour public office as a Township
Supervisor to obtain such compensation (such as by authorizing yourself to do the
work) unless the amount of compensation would be so small as to fall within the de
minimis exclusion. When the de minimis exclusion would not be applicable, only other
Supervisor(s) without a conflict of interest would be able to authorize the work to be
performed and to authorize payment to you.
In each instance of a conflict of interest, you would be required to abstain from
participation, which would include voting unless one of the statutory exceptions of
Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 11030) of the Ethics Act would have to be satisfied in the event
of a voting conflict.
If electrical work would be performed for the Township outside the scope of your
Towns 1p emp oymenf:
An agreement or arrangement whereby you/the Electrical Services Business
would perform electrical work for the Township in a private capacity would constitute a
"contract" as that term is defined in the Ethics Act.
As long as the restrictions and requirements of the Ethics Act would be observed,
the Ethics Act would not prohibit you/the Electrical Services Business from contractually
performing electrical work for the Township. However, in your public capacity as a
Township Supervisor, you generally would have a conflict of interest under Section
1103(x) of the Ethics Act in matters pertaining to actual or anticipated contract(s)
between the Township and you /the Electrical Services Business. When the de minimis
exclusion would not be applicable, only other Supervisor(s) without a conflict of interest
would be able to authorize the work to be performed and to authorize payment for the
work. You would have a conflict of interest with respect to voting to approve the
payment of compensation to you or to the Electrical Services Business for performing
electrical work for the Township if the de minimis exclusion would not be applicable.
You would also be prohibited from using the authority of your public position, or
confidential information accessed or received as a result of being a Township
Supervisor, to effectuate a private pecuniary benefit to you/the Electrical Services
Business through a detriment to a business competitor. See, Pepper, Opinion 87008.
In each instance of a conflict of interest, you would be required to abstain from
participation, which would include voting unless one of the statutory exceptions of
Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 11030) of the Ethics Act would have to be satisfied in the event
of a voting conflict.
The restrictions and requirements of Section 1103(f) of the Ethics Act would have
to be observed as to an yy contract between you/the Electrical Services Business and the
Township that would be valued at $500 or more. See, Kistler v. State Ethics
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Commission, 610 Pa. 516, 22 A.3d 223 (2011), regarding the requirements for an "open
and public process. ")
The propriety of the proposed conduct has only been addressed under the Ethics
Act; the applicability of any other statute, code, ordinance, regulation or other code of
conduct other than the Ethics Act has not been considered in that they do not involve an
interpretation of the Ethics Act. Specifically not addressed herein is the applicability of
the Second Class Township Code.
Conclusion: Based upon the submitted facts that: (1) you are a Supervisor for
Jefferson Township ( "Township "), located in Lackawanna County, Pennsylvania; (2) you
are also a Township employee; and (3 in a private capacity, you are a licensed master
electrical contractor and the owner oT an electrical services business ( "the Electrical
Services Business "), you are advised as follows.
As a Township Supervisor, you area public official subject to the provisions of
the Public Official and Employee Ethics Act "Ethics Act "), 65 Pa.C.S. § 1101 et sec .
The Electrical Services Business is a business with which you are associated in your
capacity as the owner. Subject to the statutory exclusions to the definition of "conflict"
or "conflict of interest" as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102,
pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest as a
Township Supervisor in matters that would financially impact you or the Electrical
Services Business.
If electrical work would be performed for the Township as a Township employee:
Section 1103(a) of the Ethics Act would not prohibit you from performing
electrical work for the Township as a Township employee. However, if you would
receive compensation beyond your regular Township employee compensation as a
result of performing electrical work, such as overtime pay, Section 1103a) of the Ethics
Act would prohibit you from using the authority of your public office as a Township
Supervisor to obtain such compensation (such as by authorizing yourself to do the
work) unless the amount of compensation would be so small as to fall within the de
minimis exclusion. When the de minimis exclusion would not be applicable, only other
Supervisor(s) without a conflict of interest would be able to authorize the work to be
performed and to authorize payment to you.
In each instance of a conflict of interest, you would be required to abstain from
participation, which would include voting unless one of the statutory exceptions of
Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 11030) of the Ethics Act would have to be satisfied in the event
of a voting conflict.
If electrical work would be performed for the Township outside the scope of your
Township employment.
An agreement or arrangement whereby you/the Electrical Services Business
would perform electrical work for the Township in a private capacity would constitute a
"contract" as that term is defined in the Ethics Act.
As long as the restrictions and requirements of the Ethics Act would be observed,
the Ethics Act would not prohibit you/the Electrical Services Business from contractually
performing electrical work for the Township. However, in your public capacity as a
Township Supervisor, you generally would have a conflict of interest under Section
1103(a) of the Ethics Act in matters pertaining to actual or anticipated contract(s)
between the Township and you/the Electrical Services Business. When the de minimis
exclusion would not be applicable, only other Supervisor(s) without a conflict of interest
would be able to authorize the work to be performed and to authorize payment for the
V ndrak, 17 -513
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Page 7
work. You would have a conflict of interest with respect to voting to approve the
payment of compensation to you or to the Electrical Services Business for performing
electrical work for the Township if the de minimis exclusion would not be applicable.
You would also be prohibited from using the authority of your public position, or
confidential information accessed or received as a result of being a Township
Supervisor, to effectuate a private pecuniary benefit to youlthe Electrical Services
Business through a detriment to a business competitor.
In each instance of a conflict of interest, you would be required to abstain from
participation, which would include voting unless one of the statutory exceptions of
Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 11030) of the Ethics Act would have to be satisfied in the event
of a voting conflict.
The restrictions and requirements of Section 1103(f) of the Ethics Act would have
to be observed as. to any contract between you /the Electrical Services Business and the
Township that would be valued at $500 or more.
Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act.
Pursuant to Section 1 107(11) of the Ethics Act, an Advice is a complete defense
in any enforcement proceeding initiated by the Commission, and evidence of good faith
conduct in any other civil or criminal proceeding, provided the requester has disclosed
truthfully all the material facts and committed the acts complained of in reliance on the
Advice given.
This letter is a public record and will be made available as such.
Finally, if you disagree with this Advice or if you have any
reason to challenge same, you may appeal the Advice to the full
Commission. A personal appearance before the Commission will be
scheduled and a formal Opinion will be issued by the Commission.
Any such appeal must be in writingg and must be actual)
received at the Commission within thirty (31 days of the date of this
Advice pursuant to 51 Pa. Code § 13.2(h). The : appeal may be
received at the Commission by hand deliverryy, United States mail,
delivery service, or by FAX transmission (717 - 787-- 0806j. Failure to
file such an appeal at the Commission within thirty (30) days may
result in the dismissal of the appeal.
Sinc rely,
Ma Wk"
Robin M. Hittie
Chief Counsel